There are lots of reasons big companies buy little ones. Maybe a strategic acquirer wants to enter a new geographic market or thinks owning your company will give them more pricing authority.
One of the most compelling reasons a large corporation would acquire a seven-figure business is to give their sales reps another product to sell. A sales team is one of the most expensive investments a large corporation can make. Good salespeople cost money to recruit, years to train, and a small fortune to keep happy.
Therefore, once a big company makes an investment in a sales team, they are highly motivated to give them new things to sell.
That’s where you come in. If a salesperson for a big company could easily add your offering to their pitch, expect to garner interest from acquirers.
The emphasis is on the word “easily.” Large enterprise salespeople often have lots of products to learn. For each offering in their bag, they need to master a talk track and know how to address a prospect’s many questions and objections.
Your product or service may be a perfect fit for a large enterprise company to offer their customers, but if it’s too complicated to explain or requires a salesperson to spend years learning your offering, your company will be less compelling to a strategic acquirer.
Think of the last time you ordered a Big Mac. Chances are, the person taking your money asked if you wanted fries and a drink to make it a meal. It’s a simple concept for the customer to understand and instantly jacks up the average order value.
How James Ashford Got 8 Figures for a £1.5 Million Business
In 2016 Yorkshire-based James Ashford took what little was left after his business failed and invested £4,000 in developing proposal software for accountants, which he named GoProposal. By 2020 GoProposal was a slick application with £1.5 million in revenue and hundreds of accountants using it.
That’s when he caught the attention of U.K.-based Sage. Sage’s accounting solutions are used by millions of British businesses and recommended by thousands of accounting professionals. Sage has a sales and marketing team dedicated exclusively to winning and keeping their accountants happy.
Accountants everywhere are moving away from time-based billing toward a project or annual retainer-based billing, and GoProposal was a simple addon to Sage’s core offering for accountants.
That’s one reason Sage agreed to acquire GoProposal for a healthy eight-figure sum despite only turning over £1.5 million in revenue.
Your Key Takeaway
You may be years away from selling your business, but starting to imagine who the natural acquirers are for your company can help you set your strategy for the years ahead. If your goal is to sell your company to a large enterprise organization because you think your product is a perfect addon to what they are already selling, obsess over the simplicity of your sales message. You need to make the case that your offering is so simple it can be added to their customer’s order without complicating or elongating their sales cycle. Strive for it to be as simple as “You want fries with that?”
